Rid Good Tree Of Bad Apples

April 12, 1986|By Green

The White House and the U.S. Civil Rights Commission collided this week on whether to suspend for a year the practice of reserving federal contracts for businesses owned by women or members of minority groups. The White House is right to support set-aside programs. Now it should go further and insist on reforms to reduce abuses.

The call for a suspension comes from a study conducted by the commission's staff. The report claims that set-aside programs haven't been effective in helping minorities enter the economic mainstream. That's just not so.

Set-asides began during the Nixon administration's push for black capitalism. In 1985 they were directly responsible for businesses owned by minority members or women getting more than $5 billion in U.S. contracts. Though that is less than 5 percent of the government's total, the impact was felt nationwide.

That's because businesses helped by the programs employ 1.1 million members of minority groups. And because businesses with set-aside contracts are more likely to employ workers from minority groups, the programs are effective in reducing minority unemployment. At present, the jobless rate of blacks is more than double that of whites.

Granted, there are problems, which the commission's staff underscored in calling for a moratorium. For example, various fraudulent schemes are used to get set-aside contracts. Cases range from husbands transferring ownership of their companies to their wives to major construction companies using blacks as fronts.

One reason that clamping down on unscrupulous contractors is difficult is that penalties for violating the law aren't stiff enough. In Orlando, for instance, federal officials learned that a company supposedly controlled by an American Indian actually was controlled by a white. Still, no penalty was levied.

Rep. Parren Mitchell of Maryland has a good idea for correcting this leniency. He proposes that Congress impose stiff jail terms and fines for offenders. He also proposes that companies found to be ineligible to participate be required to reimburse money the government paid them.

Following up properly may cost more. But it's worth knowing that the right people benefit from set-aside contracts.